Currently, insurance is a fundamental tool to protect our assets and assets against any unforeseen event that may arise. From a traffic accident to a serious illness, having insurance can make the difference between facing a difficult situation with peace of mind or having to face large expenses and worries.
If you are considering taking out insurance or simply want to expand your knowledge on this subject, this article will be of great help. Start!
What is insurance?
Insurance is a useful tool for people to protect themselves from the effects of risks and dangers. It consists of transferring the responsibility to an insurer that will pay or repair the damages caused by certain unforeseen events. It involves the payment of a fee (insurance premium) in exchange for an economic benefit or a service when the circumstances provided for in the policy occur.
The payment of the premium will be determined by the risk to be covered and the probability that it will occur over time. In cases where the risks are insured for large sums of money, the figure of the reinsurance company is used, which covers all or part of the risks by sharing a percentage with the insurer.
There are certain insurances that are required by law, such as car insurance, liability insurance, risk dog insurance, and home insurance for a property without a mortgage.
What is an insurance policy?
The insurance policy is the document that details the Insurance Contract in which all the coverages agreed between the insured person or company and the insurance company are found. The insurance policy is characterized by having all the rights and obligations that exist between the parties. Below we can see the basic information provided by the insurance policy:
- Personal data of the insured and the insurance company
- Detailed description of the insurance contracted, as well as possible details to take into account
- Amount of the premium to be paid and the periodicity of its payment
- Duration of the insurance: duration and date from which it is effective
- Insured sum
- Benefits and endorsements, that is, the additional coverages contracted or modifications made
- Beneficiaries of the insurance in the event that there are any, who will be the ones who will receive the compensation
What risks can be insured?
In the insurance market, there is a wide variety of insurance depending on the needs of consumers. However, not all risks can be insured. Before taking out insurance, it is necessary to know what risks can be insured. The following risks can be insured:
- It is impossible to predict when or if they will occur.
- They are possible to happen and have happened before
- They are beyond the reach of human will.
- They have an economic focus
- They are considered legal and do not infringe the rights of third parties
Who is involved in an insurance contract?
- Insurance company: company that provides insurance services and is obliged to compensate the insured in the event that the event insured in the contract occurs.
- Insured: person holding the insurance contract and who is also exposed to risk.
- Contracting party: person who signs the insurance policy and is responsible for paying the premium (remuneration for the insurance policy, is calculated based on the calculations of eventuality of the loss and the insurance history of the client).
- Beneficiary: person who is compensated according to the conditions established in the insurance contract in the event that the event occurs.
Deadlines to be taken into account in the insurance contract
- Acceptance period: this is the time that elapses between the insurance company proposing an insurance offer and the person who wishes to take out the insurance accepting the offer. Normally the acceptance period is fifteen days.
- Lack of coverage: this is the period that elapses between the policy is formalized and the date on which the insurance coverage begins. During this period, the insured does not have coverage.
- Grace period: this is the 30 days after the payment of the premium or the periodic policy, in case the insured has not made the payment. During this time, the insured will be covered.
What types of insurance are there?
When hiring insurance, we must take into account what type of insurance we want to hire based on our personal or professional needs. The types of insurance can be grouped between personal insurance, property insurance and service insurance.
Personal insurance
In personal insurance, the insured person is the primary concern. Therefore, personal insurance protects people against events that affect them directly. In this case we talk about life insurance, personal accident insurance, health insurance, dependency insurance and pension plans.
- Health or health insurance
- Life insurance
- Personal accident insurance
- Dependency insurance
Damage or property insurance
- Home Insurance
Despite all the insurances mentioned above, there is a wide variety of insurance within each type to which we can access depending on our needs. It is important to know above all what risks we are exposed to and compare what it would cost us to face the cost of one of these risks and on the other hand, what we would save if we take out insurance.